World View : Rich Nations Get the Blues : It’s not just America. Everywhere, a malaise born of frustration and disillusion afflicts industrial countries.

MUNICH, Germany — It was a sign of the times as the leaders of the world’s seven richest industrial nations breezed into town earlier this summer for their annual get-together.

Facing a daunting array of problems--a global economic slowdown, a devastated former Communist empire, potentially deadly Soviet-built nuclear reactors, large-scale migration and a war in the remnants of Yugoslavia--the seven men spent most of their three days here conspicuously avoiding them.

Instead, they simply declared their meeting a success, then left.

The performance typified the spirit of the immediate post-Cold War era--an era in which the euphoria of the West’s great victory over communism has been overwhelmed by a whole new set of problems that political leaders seem either unwilling or unable to confront and for which there seem to be few, if any, easy answers.

The result: Less than three years after Berliners danced on their wall to the applause of an elated free world, the globe’s great industrial democracies find themselves stricken by a growing sense of disappointment, frustration and worry.

If misery loves company, Americans can take comfort. They are not alone.

“In most people’s bellies, there’s a feeling the day of reckoning is coming,” said Michael Stuermer, director of the German government-financed Ebenhausen Institute just west of this comfortably rich city. “They want to believe the politicians who say everything is OK, but deep down they know it’s all lies.”

Four-fifths of all Americans, according to a Gallup Poll at the beginning of August, declare themselves dissatisfied with the way things were going in their country. Such “malaise”--the word that then-President Jimmy Carter used in 1979 to describe a similar national attitude--had not been seen since the very end of the Carter Administration.

And elsewhere in the rich industrial world, the doubts are just as strong.

* In Italy, anger at the government’s inability to combat organized crime erupted into the streets last month when protesters in the Sicilian city of Palermo, enraged at the Mafia’s assassination of a leading judge, hurled verbal abuse at President Oscar Luigi Scalfaro and Prime Minister Giuliano Amato as they attended the judge’s funeral.

Typical is the attitude of Mario Viceconte, a 33-year-old employee of Agip, Italy’s government-owned gas company, who complains that corruption is rampant and the bureaucracy fails to enforce the laws. “The hypocrisy of politicians is at the base of everything,” he said.

* In Japan, a wave of political scandals and disgruntlement over living standards have generated political apathy. The 50.7% voter turnout for July’s election for the upper house of Parliament, an all-time low for a national ballot, was widely viewed as an expression of disgust for a system in which one party, the Liberal Democrats, has held power since 1955.

Japanese politics, said Yoshiaki Kobayashi, a political scientist at Keio University, is like “a restaurant where nobody ever brings you what you ordered.”

* In Germany, where the immediate issue is how much western Germans are going to have to sacrifice in order to resuscitate the newly annexed eastern part of the country, a recent poll found 80% of those under 35 had lost faith in their political leadership’s ability to deal with the country’s problems.

“I’m of the opinion that the biggest problems of our time are too big for one land alone,” said Konstanze Bernt, a 28-year-old bank employee from western Berlin. “The material capacity of one single land, even if it’s rich, is at some point exhausted.”

Certainly the present gloom enveloping the globe’s leading industrial nations is not unprecedented.

A similar cloud of pessimism hung over the United States and Western Europe just over a decade ago as recession, inflation, rocketing oil prices, the Iranian hostage crisis and new Soviet missile-rattling combined to test the West’s political will.

The mood in the United States was so bad that in July, 1979, Carter told a national television audience that “the erosion of our confidence in the future is threatening to destroy the social and political fabric of America.”

Now economic growth in the industrial world is more anemic than at any time since the recession triggered by the 1979 oil shock. Britain remains mired in the third year of recession; recoveries in the United States and Canada are pathetically weak. Growth is slowing throughout Europe, and even Japan is limping along more slowly than at any time since 1974.

“People as well as economies are going through a kind of depression,” said Richard Davidson, an analyst with Morgan Stanley International, a London-based investment-banking house.

Today’s crisis of confidence, however, differs from that of a decade ago in ways that make it even more unmanageable to government leaders and unpalatable to the public.

The oil shock, the Iranian hostage crisis and the Soviet missile deployments of the late 1970s and early 1980s all presented clearly defined political adversaries and at least a vague framework of political options for dealing with them.

Today, the issues threatening the West are of another dimension: elusive, remote and ill-understood. Most have no clearly visible enemy. “Things used to be much simpler,” said Xavier Mabille, one of Belgium’s leading political analysts.

Throughout the industrial world, governments are seen as part of the problem, not part of the solution. In a comment that would ring true all over the West, Yukio Suzuki, an economist at Yokohama University, said, “What we have here is a pork-barrel system linked to the interest of government ministries and politicians.”

Europe--especially Germany--is undergoing a special trauma. Just as the joy that accompanied the end of Soviet communism and the fall of the Iron Curtain was greater here than elsewhere, so too is the disappointment at problems that have followed.

The war in what used to be Yugoslavia mocks disciples of the European dream who were convinced that armed conflict in Europe was a thing of the past. The growth of the European Community, joining former adversaries in an unbreakable economic embrace, left leaders totally unprepared for war on their own continent.

The people of Western Europe have grown angry and frustrated that their leaders have no solutions. The leaders themselves are overwhelmed. Little wonder. There are few answers to the questions they face.

If eastern Germany--the most technically advanced and efficient little corner of the former Soviet Bloc--requires $100 billion annually to make an arduous transition to a free-market economy, what is needed to rebuild the entire region?

Estimates reach 5% to 10% of the industrialized nations’ gross national product, or up to $1 trillion annually. Yet voters in the rich industrial world are balking even at token economic sacrifice. “When the bill is presented,” said Willy de Cler, a Belgian representative to the European Parliament, “some people feel they are being asked to pay too much.”

Not only in the United States have voter revolts made higher taxes politically off-limits. Three years ago, after Japan’s ruling Liberal Democrats implemented a 3% consumption tax, voters deprived the party of its majority in the upper house of Parliament for the first time. As a result, despite continuing budget deficits, the subject of tax increases has become a political taboo in Tokyo.

Cuts in government benefits are no more popular. A recent German government attempt to eliminate just one of the 42 days of annual vacation and paid holidays enjoyed by German workers triggered trade union outrage and warnings of strikes.

“People see the system has real financial problems, but no one is willing to sacrifice themselves,” said Gerd Wartenberg, a Social Democrat in the German Parliament.

Luca Ricco, a 29-year-old architectural student in Rome, understands what lies ahead--and he doesn’t like it. “We have been under the illusion that Italy is richer than it really is,” he said. “Now it’s hard to face today’s reality.”

As hard pressed as Western Europeans may feel, if their governments do not provide desperately needed aid for Eastern Europe and the former Soviet Union, what is to prevent waves of economic refugees from moving west in search of a better life?

Recent surveys have indicated that as many as 17.5 million Eastern Europeans will migrate to Western Europe in “the foreseeable future,” according to Meinhard Miegel, director of the Economic and Social Institute in Bonn.

Yet just last month, all the rich countries of Europe but Germany slammed the door on refugees from the former Yugoslav republic of Bosnia-Herzegovina. So far, Germany has accepted 200,000 of the estimated 2 million refugees from what used to be Yugoslavia. The other 11 EC countries combined have taken 18,000.

If war in Yugoslavia--population around 22 million--generates 2 million refugees, what happens if serious social disorder breaks out in Russia and the former Soviet satellites of Eastern Europe, with a combined population of about 300 million?

How do democratic states combat international organized crime and at the same time fulfill commitments to easing freedom of movement within the European Community?

How is it possible to implement a responsible environmental policy if it means sharply reduced living standards?

“I’m convinced we’ve arrived at a real turning point in human history, and we’re just now realizing it,” commented Karl Lamers, chief parliamentary foreign affairs spokesman for Chancellor Helmut Kohl’s Christian Democrats. “Politicians have stumbled into these problems, and it isn’t possible to adjust to them in three years. There’s a feeling of being so overwhelmed--that we can’t deal with them.”

Compounding the problems is that two of the globe’s biggest powers, Japan and Germany, are reluctant to assume anything approaching the responsibility commensurate with their size and status.

Sitting in his office after a long debate on the deployment of a single German destroyer to assist in enforcing the U.N.-mandated embargo against Serbia, Lamers called the debate “one between ourselves, not with reality. Sure, we have to be restrained in our actions, but we can’t just look away from crises like Yugoslavia, either.”

Huesyin Yanikoglu, a 21-year-old technical artist who emigrated from Turkey 13 years ago and is now a German citizen, said Germany’s response to Eastern Europe’s need had disappointed him.

“Germany is ridiculously rich,” he said, “and if Europe is supposed to be one house, then all the rooms must be inhabitable. . . .”

Japan has even colder feet. “When confronted with issues of critical international importance, the country’s leadership appears frequently in a quandary, indeed, paralyzed--somehow unwilling or unable to project positively its enormous power,” said Kenneth Courtis, Tokyo-based senior economist for Deutsche Bank Capital Markets (Asia).

Japan took 21 months to pass a law that will enable it to send up to 2,000 noncombat troops only to assist in overseas disaster relief and U.N. peacekeeping operations, but not in any international actions involving the use of force. The move amounted to an initial, tenuous step away from Japan’s post-World War II “economics-only” foreign policy.

Japan has signaled to Russia that it is ready with as much as $28 billion in economic aid, but only if Russia recognizes Japan’s sovereignty over four northern islands that Soviet troops seized at the end of World War II. At the recent economic summit here, Prime Minister Kiichi Miyazawa focused all his efforts on winning support from the other six for Japan’s territorial demands.

Courtis suggested that Japan could have taken the lead in financing the dismantling of the former Soviet Union’s massive nuclear arsenal or in helping the Commonwealth of Independent States convert command economies and war machines to civilian uses.

As President Bush has learned, the new malaise is bad news for political incumbents--just as the last wave more than a decade ago toppled the governing parties of the United States, Canada, Britain and France. Bush, who registered an 85% approval rating during the Gulf War, finds himself trailing Democratic rival Gov. Bill Clinton 51%-36% in a post-Republican Convention CBS-New York Times poll.

The President has lots of company. Canadian Prime Minister Brian Mulroney’s popularity dropped from a high of 43% to as low as 11% earlier this year before rebounding to 21%. French President Francois Mitterrand’s rating fell from 56% to 26% and Kohl’s fell from 68%--when Germany was reunified--to 27%. Although Miyazawa recently recovered some of his losses, the Japanese leader’s support also plummeted from nearly 56% right after he took office late last year to as low as 22% in March. (It’s now 34%.)

Even in Britain, where Prime Minister John Major was reelected last spring, polls showed voters were expressing not so much approval for the incumbent as a fear of switching to the Labor Party. And his popularity has sagged to 50% from a high of 63% shortly after he took over from Margaret Thatcher in 1990.

Beleaguered and under growing pressure from disgruntled voters, many of these leaders are avoiding the risky course of confronting the new problems and demanding unpopular sacrifices. Instead, they are retreating into the policies of national self-interest. Their dogged pursuit of narrow national interests is leaving a host of international problems unresolved.

Europeans are turning against the treaty on political and monetary union that was signed by the 12 EC leaders last December in the Dutch town of Maastricht. Danish voters have already turned the treaty down. The public mood in Germany has shifted sharply against giving up the deutschemark for a common Euro-currency. A Sept. 20 referendum in France, once seen as a virtual sure thing, is now regarded as too close to call.

While Japan watches passively, the EC’s refusal to make further cutbacks in its agricultural subsidies has left six years of world trade-liberalization talks deadlocked. Mitterrand’s government, fearful of antagonizing farmers before the Sept. 20 referendum, will not let the EC adopt a more flexible stance before then.

Meanwhile, in the United States and Europe, public disillusionment is pushing voters to the political extremes, especially on the right. In Germany, the rise of alternative parties could end the country’s 40-year formula for political stability in which both multi-party coalition governments and the main opposition parties emanate from the mainstream.

From Italy to Japan, scandal is turning voters away from politics. In Japan only last week, Liberal Democratic Party kingmaker Shin Kanemaru resigned after admitting he had taken $4 million in 1990 from a trucking company. In a 1990 parliamentary election campaign, even a ruling party candidate played on voters’ disgust by displaying posters featuring the phrase, “I can’t stand it any longer.”

“Young people have almost no interest in politics,” said Takako Sodei, a professor at Ochanomizu Women’s University. “Only things that surround their daily lives interest them. Young men are interested in cars. Young women are interested in fashion.”

A 33-year-old Tokyo secretary explained why she didn’t vote in last July’s election. “Our representatives are chosen in elections,” she said, “but they don’t represent us. The winners get elected because organizations that support them gather the votes.”

Yet throughout the industrial world, those in power steadfastly refuse to face up to the tough issues. Kohl, for example, has resisted pressure from his own party to deliver a “blood-sweat-and-tears” speech that would tell voters what they are gradually beginning to understand on their own: that real German and European unity can come only with material sacrifice and harder work.

Stuermer predicts that if there is no revival of political determination, the result will be similar to earlier eras when problems became too great for the leaders of the time: a gradual slide into chaos.

“We keep going as if nothing has changed,” he said. “It’s crazy. We have to cut the liberal benefits the system offers and tell people they have to work harder, but it won’t happen.”

“People say, ‘Why do we have politicians if they can’t do anything about the problems?’ ” added Wartenberg, the German member of Parliament. “This all builds fear and can lead to an alienation that can last years.”

Knocked Off Their Pedestals Frustrated citizens of the world’s great industrial democracies, feeling overwhelmed by economic and other problems, are taking it out on their elected leaders in opinion polls. All six of these top leaders have seen their approval ratings drop sharply from earlier peaks. President Bush:

Previous Approval Rating: 85%, 1991

1992 Approval Rating: 36% August, this year German Chancellor Helmut Kohl:

Previous Approval Rating: 68%, 1990

1992 Approval Rating: 27% June, this year* British Prime Minister John Major:

Previous Approval Rating: 63%, 1991

1992 Approval Rating: 50% August, this year Japanese Prime Minister Kiichi Miyazawa:

Previous Approval Rating: 56% (1991)

1992 Approval Rating: 34% August, this year French President Francois Mitterrand:

Previous Approval Rating: 56%, 1991

1992 Approval Rating: 26% July, this year Canadian Prime Minister Brian Mulroney:

Previous Approval Rating: 43%, 1985

1992 Approval Rating: 21% August, this year Sources: Opinion polls in six nations Notes: These figures indicate a trend. But exact figures may vary because different polling organizations may use different sampling techniques and ask different questions. For instance, people may answer differently when asked “Do you approve of Mr. X?” versus “Would you vote for Mr. X?” * Weighted average of figures for eastern (20%) and western (29%) Germany.

THE BIG SEVEN STAGNATE

Although most have rebounded a bit, the world’s largest industrial economies are still anemic. Actual economic growth last year and projected growth this year:

1991 1992 United States -0.7% 2.1% Germany 3.1 1.3 Britain -2.2 0.4 Japan 4.5 1.8 France 1.3 2.0 Canada -1.5 2.3 Italy 1.4 1.5

Source: Organization for Economic Cooperation and Development

Also contributing to this story were Times researchers Sarah Wolozin in Rome and Petra Falkenberg in Berlin.